Gaza truce over, Israel soldier captured, 70 dead in Rafah shelling

A Palestinian man stands outside his badly damaged house in Beit Hanoun town, which witnesses said was heavily hit by Israeli shelling and air strikes during an Israeli offensive, in the northern Gaza Strip, August 1, 2014. REUTERS/Suhaib Salem

* Ceasefire began at 8 a.m. (0500 GMT)

* Israel says militants attacked its troops 90 minutes later

* Gaza ministry says 70 killed by Israeli shelling

* Obama, Ban demand release of apparently captured soldier

By Nidal al-Mughrabi and Jeffrey Heller

GAZA/JERUSALEM, Aug 1 (Reuters) - Israel declared a Gaza ceasefire over on Friday, saying Hamas militants breached the truce soon after it took effect and apparently captured an Israeli officer while killing two other soldiers.

Renewed Israeli shelling killed more than 70 Palestinians and wounded some 220, hospital officials said. Prime Minister Benjamin Netanyahu called his security cabinet into special session and publicly warned Hamas and other militant groups they would "bear the consequences of their actions".

The 72-hour break announced by U.S. Secretary of State John Kerry and U.N. Secretary-General Ban Ki-moon was the most ambitious attempt so far to end more than three weeks of fighting, driven by mounting international alarm over a rising Palestinian civilian death toll.

U.S. President Barack Obama called for the Israeli soldier's unconditional release and said that after the day's events it would be tough to reinstate a truce.

"I think it's going to be very hard to put a ceasefire back together again if Israelis and the international community can't feel confident that Hamas can follow through on a ceasefire commitment," he told a news conference.

Obama said he has been in constant contact with Netanyahu about the situation, and added that more needs to be done to protect Palestinian civilians.

Kerry said he had asked Qatar, which is close to Hamas, and Turkey to help free the soldier. Hamas, the Islamist group dominant in Gaza, has neither confirmed nor denied holding him.

"We have urged them, implored them, to use their influence to do whatever they can to get that soldier returned," a senior State Department official told reporters travelling with Kerry. "Absent that, the risk of this continuing to escalate, leading to further loss of life, is very high."

Turkey's foreign minister said his country would do its best to help, but that reinstating the truce should be the priority.

Ban also condemned Hamas's reported violation of the ceasefire and demanded the release of the soldier.

The ceasefire, which began at 8 a.m. (0500 GMT), had prompted Palestinian families to trek back to battle-devastated neighbourhoods where rows of homes have been reduced to rubble. It was to be followed by Israeli-Palestinian negotiations in Cairo on a longer-term solution.

A senior Egyptian Foreign Ministry official said the talks would still begin on Sunday, and that Cairo "expects the two sides to cease fire before the launch of negotiations".

SEARCHING FOR TUNNELS

The Israeli military said that 90 minutes into the truce, militants attacked soldiers searching for tunnels in the southern Gaza Strip used to infiltrate fighters into Israel.

"Out of a tunnel access point or several, terrorists came out of the ground. At least one was a suicide terrorist who detonated himself. There was an exchange of fire," said Lieutenant-Colonel Peter Lerner, a military spokesman. Two of the soldiers were killed.

"The initial indication suggests that a soldier has been abducted by terrorists during the incident," he told reporters. Mark Regev, a Netanyahu spokesman, said Hamas was responsible for the attack.

Asked if the ceasefire was over, Lerner replied: "Yes. We are continuing our activities on the ground." He said Israeli forces were mounting an "extensive effort" to locate the officer, Second-Lieutenant Hadar Goldin, 23.

Kerry said the international community "must now redouble its efforts to end the tunnel and rocket attacks by Hamas terrorists on Israel and the suffering and loss of civilian life".

The Gaza Health Ministry said more than 70 people were killed by Israeli shelling after the incident near the southern town of Rafah.

There was no immediate word from militant groups on whether any were holding the officer. Sami Abu Zuhri, a spokesman for the dominant Hamas movement in Gaza, said Israel was trying to mislead the world and "cover up its Rafah massacre".

Netanyahu spoke by telephone with Kerry and told him "the Palestinians had blatantly breached the humanitarian ceasefire" and attacked Israeli soldiers.

"Israel will take all necessary steps against those who call for its annihilation and terrorise its citizens," a statement from Netanyahu's office quoted him as saying.

INTERNATIONAL PRESSURE

Israel launched its offensive in Gaza on July 8, unleashing air and naval bombardments in response to a surge of cross-border rocket attacks. Tanks and infantry pushed into the territory of 1.8 million people on July 17.

Gaza officials say at least 1,555 Palestinians, mostly civilians, have been killed and 7,000 wounded. Sixty-three Israeli soldiers have been killed and more than 400 hurt. Three civilians have been killed by Palestinian rockets in Israel.

The Palestinian death toll is now higher than during the last major outbreak of hostilities in 2008-2009, when more than 1,400 died.

Eight rockets and mortar bombs were fired from Gaza at Israel after the ceasefire began on Friday, the military said, adding that one was intercepted by the Iron Dome system and seven hit open areas.

The truce had left Israeli ground forces in place in the Hamas-dominated Gaza Strip and a military spokeswoman had said operations would continue to destroy a warren of tunnels through which the Islamist group has menaced Israel's southern towns and army bases.

Israeli officials have long voiced concern that militants would try to capture a soldier or an Israeli civilian. In 2011, Israel released more than 1,000 Palestinian prisoners in exchange for Gilad Shalit, a soldier snatched by Hamas five years earlier.

Amid strong public support in Israel for the Gaza campaign, Netanyahu had faced intense pressure from abroad to stand his forces down. International calls for an end to the bloodshed intensified after shelling on Wednesday that killed 15 people sheltering in a U.N.-run school in Gaza's Jabalya refugee camp.

CAIRO NEGOTIATIONS

Hamas, isolated in an Arab world concerned about the rise Islamist militancy, is seeking an end to Israel's blockade of Gaza. It also wants a hostile Egypt to ease restrictions at its Rafah crossing with the territory imposed after the military toppled Islamist president Mohamed Mursi last July.

Israel has balked at freeing up Gaza's borders under any de-escalation deal unless Hamas's disarmament is also guaranteed.

Saudi Arabia's King Abdullah, in a speech read out on his behalf on state television on Friday, accused Israel of committing "war crimes against humanity" in Gaza.

A senior State Department official travelling with Kerry in India had said U.S. Deputy Secretary of State Bill Burns would arrive in Cairo on Saturday and that Frank Lowenstein, the acting U.S envoy for Middle East peace, and another U.S. official, Jonathan Schwartz, would be there on Friday.

The Palestinian delegation would be comprised of Hamas, Western-backed Fatah, the Islamic Jihad militant group and a number of smaller factions, Palestinian officials said.

But U.S. officials said Israel and the United States would not sit across the table from Hamas, which the two countries, along with the European Union, consider a terrorist group.

(Additional reporting by Ari Rabinovitch, David Brunnstrom in New Delhi; Lesley Wroughton in Washington; Michelle Nichols at the United Nations; and Omar Fahmy in Cairo; Writing by Jeffrey Heller in Jerusalem; Editing by Giles Elgood/Mark Heinrich)

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